SK: US Dollar Steadies After A Few Slips Against the Yen
The US dollar had been weak against the yen but managed to gain some ground on Monday after United States Secretary of the Treasury, Steven Mnuchin, said that a strong dollar would definitely be a good thing over a longer stretch of time. Of course, the US dollar is still undervalued against a handful of currencies in a contentious global environment.
More specifically, the greenback rose to reach a session high of 109.05 after Mnuchin played down US President Donald Trump’s interview with the Wall Street Journal, last week; an interview in which the businessman-turned-Commander In Chief said that the dollar was “getting too strong.”
Indeed, Commonwealth Foreign Exchange chief market analyst Omer Esiner notes that Mnuchin’s comments seem to have helped. He says, “In an otherwise quiet session, the comments from the Treasury secretary may be giving the dollar a little bit of a leg to stand on.”
It was not that long before that the US dollar had fallen to 108.14 against the yen, which was the lowest price since the middle of November; amid rising tensions over North Korea’s heavy desire for Japan’s safe currency.
Essentially, Credit Agricole foreign exchange strategist Vassili Serebriakov comments, “I think we started out in a risk-off mode but then that’s been unwinding in a more risk favourable way.”
Aside from concern over North Korea’s actions, we are still waiting to see how the market is going to fully react to this move. With the Easter holiday, after all, many of the largest trading hubs in Europe were closed.
Still, Commonwealth Financial chief investment officer, Brad McMillan notes, “You’ve had President Trump run on certain campaign issues, and many of those seem to be shifting to a more mainstream approach. From a financial markets perspective… that can be seen as a positive.”
Finally, Boston Private Wealth chief market strategist Robert Pavlik shares, “People want to be focused on earnings and how the economy is doing. Financials should do well… but they’ve given most of the gains back that they’ve seen since President Trump was elected.”
Overall, the US dollar index—which measure the American currency against six other major global currencies-was down roughly a quarter percent, to 100.33.
